For given change in interest rates, percentage change in present value of bond is classified as

A. price sensitivity

B. yield sensitivity

C. maturity sensitivity

D. premium sensitivity

Answer: Option A

Solution(By Examveda Team)

For given change in interest rates, percentage change in present value of bond is classified as price sensitivity. Price sensitivity can be defined as the degree to which consumers' behaviors are affected by the price of the product or service. Price sensitivity is also known as price elasticity of demand and this means the extent to which sale of a particular product or service is affected.